IN THE SUPREME COURT OF THE STATE OF CALIFORNIA€¦ · Answer to the Petition for Review...

093810-0181-15876-Active.23457915.2 10/25/2017 2:39 PM

Case No. S244737

IN THE SUPREME COURT OF THE STATE OF

CALIFORNIA __________________________

MONTROSE CHEMICAL CORPORATION OF CALIFORNIA, Petitioner,

v.

SUPERIOR COURT OF THE STATE OF CALIFORNIA, COUNTY OF LOS ANGELES,

Respondent;

CANADIAN UNIVERSAL INSURANCE COMPANY, INC., et al.,

Real Parties In Interest.

__________________________

After a Decision by the Court of Appeal,

Second Appellate District, Division Three

Civil Case No. B272357

After Grant of Review and Transfer to Court of Appeal to Vacate

Order Denying Writ of Mandate and Order to Show Cause

Supreme Court Case No. S236148

After Denial of Petition for Writ of Mandate by the Court of Appeal,

Second Appellate District, Division Three

Civil Case No. B272387

Petition from the Superior Court of the State of California

for the County of Los Angeles

Case No. BC 005158, Honorable Elihu Berle, Presiding

__________________________

ANSWER IN OPPOSITION TO MONTROSE CHEMICAL

CORPORATION OF CALIFORNIA’S PETITION FOR REVIEW

__________________________

093810-0181-15876-Active.23457915.2 10/25/2017 2:39 PM

SIMPSON THACHER & BARTLETT LLP Andrew T. Frankel (pro hac vice) (212) 455-2000 [email protected] 425 Lexington Avenue New York, New York 10017 Deborah L. Stein (State Bar No. 224570) (310) 407-7500 [email protected] 1999 Avenue of the Stars, 29th Floor Los Angeles, California 90067

Attorneys for Real Parties in Interest Travelers Casualty and Surety

Company (formerly known as Aetna Casualty and Surety Company) and

The Travelers Indemnity Company

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TABLE OF CONTENTS

Page

ANSWER ...................................................................................................... 5

CONCLUSION ............................................................................................. 9

VERIFICATION ......................................................................................... 10

CERTIFICATE OF COMPLIANCE .......................................................... 11

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TABLE OF AUTHORITIES

Cases

Paul v. Milk Depots, Inc., 62 Cal. 2d 129 (1964) .......................................... 7

Statutes

CALIFORNIA RULES OF COURT, RULE 8.500 .............................................. 5, 6

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ANSWER

Pursuant to California Rule of Court 8.500, defendants and real

parties in interest Travelers Casualty and Surety Company and The

Travelers Indemnity Company (collectively, “Travelers”) submit this

Answer to the Petition for Review (“Petition”) filed by Montrose Chemical

Corporation of California (“Montrose”). Travelers did not affirmatively

move for summary adjudication on the question of “horizontal” versus

“vertical” exhaustion in the trial court, but did oppose Montrose’s motion

for the reasons set forth in the record, including that Montrose failed to

establish that California law applied to the Travelers policies and that the

relief Montrose was seeking was improper for reasons that are independent

of the question of “horizontal” versus “vertical” exhaustion.

Following the trial court’s order on summary adjudication, Montrose

petitioned the Court of Appeal for a writ of mandate invalidating that order,

at which time Travelers submitted a partial Joinder in Preliminary

Opposition to Montrose’s Petition for Writ of Mandate or Other

Appropriate Relief filed by certain other defendants. The California Court

of Appeal for the Second Appellate District (“Court of Appeal”) denied

Montrose’s petition. Montrose then filed its initial Petition for Review to

the Supreme Court of California, which Travelers opposed in its initial

Answer in Opposition to the Petition for Review. At this Court’s direction,

the Court of Appeal subsequently issued an Order to Show Cause why the

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relief Montrose sought should not be granted. After briefing and oral

argument, the Court of Appeal issued its opinion (the “DCA Opinion”)

which denied Montrose the full relief it sought. Now, by way of the

Petition, Montrose again seeks relief from this Court.

In the Petition, Montrose suggests the DCA Opinion presents an

“‘important’ question of law” that “requires prompt correction” because the

DCA Opinion—according to Montrose—establishes “new law” that would,

inter alia, force policyholders like Montrose to “incur significant time and

expense in unwieldy coverage litigations like this one.” (Petition at 11 and

16.) This is essentially the same substantive argument advanced by

Montrose in its original petition to the Court of Appeal for writ of mandate.

In its petition to the Court of Appeal, Montrose argued that—absent writ

relief—the trial court order that prompted Montrose’s appeal might lead

Montrose to “suffer a significant delay and incur substantial expense” by

“requir[ing]” Montrose to litigate issues it may not otherwise need to

pursue. (Petition for Writ of Mandate at 14 and 23; see also Reply ISO at

10.)

But seeking to limit the amount of litigation a litigant might face

under certain narrow circumstances does not render an issue an “important

question of law” worthy of interlocutory Supreme Court review. CAL. R.

CT. 8.500. This is particularly true here, where the DCA Opinion simply

applied the unremarkable proposition that “California law requires that

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insurance contracts be interpreted according to their terms” when

determining the method of exhaustion and attachment point of any given

excess policy. DCA Opinion at 43-44; see also id. at 31. Indeed,

Montrose’s Petition is patently premature because (i) Montrose’s stated

concerns are purely speculative and will potentially be rendered moot as the

proceedings in this case develop, and (ii) resolution of any appellate issues

concerning exhaustion can be adequately resolved, if necessary, through the

ordinary course following trial. This matter is therefore inappropriate for

review by this Court. See Paul v. Milk Depots, Inc., 62 Cal. 2d 129, 132

(1964) (“the duty of this court . . . is to decide actual controversies by a

judgment which can be carried into effect, and not to give opinions upon

moot questions or abstract propositions”) (internal quotations and citations

omitted).

Moreover, Montrose’s claim that the DCA Opinion may require it to

litigate issues that it otherwise might not need to pursue is an argument that

virtually any litigant can make upon the denial of any motion for summary

adjudication, regardless of the applicable law. Meanwhile, in this case,

there is a strong likelihood no appellate court will ever need to reach the

issue of “horizontal” versus “vertical” exhaustion if any one of the

numerous issues that have yet to be resolved and which are entirely

unrelated to exhaustion—such as the applicability of policies’ pollution

exclusions—ultimately precludes Montrose from obtaining the full

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recovery it is seeking. Montrose simply speculates that—if it does not

obtain a favorable result from this Court—it may need to engage in a

measure of litigation greater than it believes it would in the absence of the

DCA Opinion.

But, at bottom, Montrose’s real purpose for seeking a ruling that

vertical exhaustion should apply has little to do with resolving an

“important question of law” or avoiding litigation. Rather, as Montrose—

an active and long-experienced litigant in the California courts—candidly

admitted during the trial court proceedings, its real goal in seeking a ruling

on the issue of vertical exhaustion is (and remains) to enable Montrose to

put settlement pressure on individual defendants and otherwise increase its

settlement leverage. That was a point Montrose repeatedly expressed to the

trial court during the hearing on the motions below, not—as it now

contends—that this issue raises an important question of law or that it

would somehow streamline the litigation. (See, e.g., 1PA1 at 8:22–9:4)

(“Your Honor, I tried to step back after all the papers that were filed with

the Court over the past several months to really remind myself why this

issue is important to the case . . . . And the reason was it was posing an

impediment for settlement discussions, particularly with the higher-lying

carriers.”); (id. at 16:7-10) (“Settlement discussions, I think as we’ve seen

in this case, are unduly and unnecessarily hampered if particularly the high-

lying carriers have an argument that ‘you may never reach our layer.’”). A

ii

PROOF OF SERVICE

SERVICE LIST Brook B. Roberts, Esq. John M. Wilson, Esq. Drew T. Gardiner LATHAM & WATKINS LLP 12670 High Bluff Drive San Diego, California 92130 Telephone: (858) 523-5400 Facsimile: (858) 523-5450

Counsel for Montrose Chemical Company of California

Kenneth Sumner, Esq. Lindsey A. Morgan, Esq. SINNOTT PUEBLA CAMPAGNE & CURET APPC 2000 Powell Street, Suite 830 Emeryville, CA 94608 Telephone: (415) 352-6200 Facsimile: (415) 352-6224

Counsel for AIU Insurance Company, American Home Assurance Company, Granite State Insurance Company, Landmark Insurance Company, Lexington Insurance Company, National Union Fire Insurance Company of Pittsburgh, PA, and New Hampshire Insurance Company

Max H. Stern, Esq. Jessica E. LaLonde, Esq. DUANE MORRIS LLP One Market Plaza Spear Street Tower, Suite 2000 San Francisco, CA 94105 Telephone: (415) 957-3000 Facsimile: (415) 957-3001

Counsel for

American Centennial Insurance Company

Bruce H. Winkelman, Esq. CRAIG & WINKELMAN LLP 2140 Shattuck Avenue, Suite 409 Berkeley, CA 94704 Telephone: (510) 549-3330 Facsimile: (510) 217-5894

Counsel for

American Re-Insurance Company

Alan H. Barbanel, Esq. Ilya A. Kosten, Esq. BARBANEL & TREUNER, P.C. 1925 Century Park East, Ste. 350 Los Angeles, CA 90067 Telephone: (310) 282-8088 Facsimile: (310) 282-8779

Counsel for

Lamorak Insurance Company and Transport

Insurance Company

iii

PROOF OF SERVICE

Steven M. Crane, Esq.

Barbara S. Hodous, Esq.

BERKES, CRANE, ROBINSON & SEAL LLP

515 S. Figueroa Street, Suite 1500

Los Angeles, CA 90071

Telephone: (213)955-1150 Facsimile: (213)955-1155

Counsel for

Columbia Casualty Company and Continental

Casualty Company

Peter L. Garchie, Esq.

James P. McDonald, Esq.

LEWIS BRISBOIS BISGAARD & SMITH

LLP

701 B Street, Suite 1900

San Diego, CA 92101

Telephone: (619)233-1006

Facsimile: (619) 233-8627

Counsel for

Employers Mutual Casualty Company

Bryan M. Barber, Esq.

BARBER LAW GROUP

525 University Avenue, Suite 600

Palo Alto, CA 94301

Telephone: (415)273-2930

Facsimile: (415) 273-2940

Counsel for

Employers Insurance of Wausau

Kevin G. McCurdy, Esq.

Vanci Y. Fuller, Esq.

MCCURDY & FULLER LLP

800 South Barranca, Suite 265

Covina, CA 91723

Telephone: (626) 858-8320

Facsimile: (626) 858-8331

Counsel for

Everest Reinsurance Company (as Successor-

in-Interest to Prudential Reinsurance

Company) and Mt. McKinley Insurance

Company (as Successor-in-Interest to

Gibraltar Casualty Company)

Kirk C. Chamberlin, Esq.

Michael Denlinger, Esq.

CHAMBERLIN KEASTER LLP

16000 Ventura Blvd, Suite 700

Encino, CA 91436

Telephone: (818) 385-1256

Facsimile: (818) 385-1802

Counsel for

Providence Washington Insurance Company

as successor by way of merger to Seaton

Insurance Company, formerly known as

Unigard Security Insurance Company,

formerly known as Unigard Mutual Insurance

Company

iv

PROOF OF SERVICE

Charles R. Diaz, Esq.

Andrew J. King, Esq.

ARCHER NORRIS

777 S. Figueroa Street, Suite 4250


Telephone: (213) 437-4000

Facsimile: (213) 437-4011

Counsel for

Fireman's Fund Insurance

Company and National Surety Corporation

Linda Bondi Morrison, Esq.

Ryan B. Luther, Esq.

TRESSLER LLP

2 Park Plaza, Suite 1050

Irvine, CA 92614

Telephone: (949) 336-1200

Facsimile: (949) 752-0645

Counsel for

Allstate Insurance Company (solely as

Successor-in-Interest to Northbrook Excess

and Surplus Insurance Company)

Jordon E. Harriman, Esq.

LEWIS, BRlSBOIS, BISGAARD & SMITH

LLP

633 West 5th Street, Suite 4000


Telephone: (213) 250-1800

Facsimile: (213) 250-7900

Counsel for

General Reinsurance Corporation

and North Star Reinsurance Corporation

Michael J. Balch, Esq.

BUDD LARNER PC

150 John F. Kennedy Parkway

Short Hills, NJ 07078-2703

Telephone: (973)315-4445

Facsimile: (973)379-7734

Counsel for

General Reinsurance Corporation

and North Star Reinsurance Corporation

Thomas R. Beer, Esq.

Peter J. Felsenfeld, Esq.

HINSHAW & CULBERTSON LLP

One California Street, 18th Floor

San Francisco, CA 94111

Telephone: (415)362-6000

Facsimile: (415)834-9070

Counsel for

HDI-Gerling Industrie Versicherlungs, AG

(“HDI-Gerling”), formerly known as Gerling

Konzern Allgemeine Versicherungs-

Aktiengesellschaft

v

PROOF OF SERVICE

Andrew McCloskey, Esq.

McCLOSKEY, WARING, WAISMAN &

DRURY LLP

12671 High Bluff Drive, Suite 350

San Diego, CA 92130

Telephone: (619) 237-3095

Facsimile: (619) 237-3789

Counsel for

Westport Insurance Corporation formerly

known as Puritan Insurance Company,

formerly known as The Manhattan Fire and

Marine Insurance Company

Randolph P. Sinnott, Esq.

SINNOTT, PUEBLA, CAMPAGNE &

CURET, APLC

550 S. Hope Street, Suite 2350

Los Angeles, California 90017

Telephone: (213)996-4200

Facsimile: (213)892-8322

Counsel for

Zurich International Ltd., Hamilton, Bermuda

Philip R. King, Esq.

John Daly, Esq.

MECKLER BULGER TILSON MARICK &

PEARSON LLP

123 North Wacker Drive, Suite 1800

Chicago, IL 60606

Telephone: (312)474-7900

Facsimile: (312)474-7898

Counsel for

Zurich International Ltd., Hamilton, Bermuda

Richard B. Goetz, Esq.

Zoheb P. Noorani, Esq.

O’MELVENY & MYERS LLP

400 South Hope Street

Los Angeles, California 90071

Telephone: (213) 430-6000

Facsimile: (213) 430-6407

Counsel for

TIG Insurance Company

Elizabeth M. Brockman, Esq.

SELMAN & BREITMAN LLP

11766 Wilshire Boulevard, Suite 600


Telephone: (310) 445-0800

Facsimile: (310) 473-2525

Counsel for

Federal Insurance Company

STATE OF CALIFORNIASupreme Court of California

PROOF OF SERVICE

STATE OF CALIFORNIASupreme Court of California

Case Name: MONTROSE CHEMICAL CORPORATION OF CALIFORNIA v. S.C (CANADIAN UNIVERSAL INSURANCE COMPANY)

Case Number: S244737Lower Court Case Number: B272387

1. At the time of service I was at least 18 years of age and not a party to this legal action.

2. My email address used to e-serve: [email protected]

3. I served by email a copy of the following document(s) indicated below:

Title(s) of papers e-served:Filing Type Document Title

ANSWER TO PETITION FOR REVIEW (WITH ONE TIME RESPONSIVE FEE)

Answer in Opposition to Petition for Review

Service Recipients:Person Served Email Address Type Date / Time

Andrew MccloskeyMcCloskey Waring & Waisman LLP179511

[email protected] e-Service

10-25-2017 6:53:48 PM

Andrew FrankelSimpson Thacher & Bartlett, LLPNY2409423


10-25-2017 6:53:48 PM

Barbara HodousBerkes Crane Robinson & Seal LLP102732


10-25-2017 6:53:48 PM

Bruce WinkelmanCraig & Winkelman, LLP124455


10-25-2017 6:53:48 PM

Bryan BarberThe Barber Law Group118001


10-25-2017 6:53:48 PM

Charles DiazArcher Norris097513


10-25-2017 6:53:48 PM

Deborah SteinSimpson Thacher & Bartlett LLP224570


10-25-2017 6:53:48 PM

Elizabeth BrockmanSelman Breithman, LLP155901


10-25-2017 6:53:48 PM

Frederick BennettSuperior Court of Los Angeles CountyCTCSL-001


10-25-2017 6:53:48 PM

Ilya KostenBarbanel & Treuer P.C.00173663


10-25-2017 6:53:48 PM

John WilsonLatham & Watkins - San Diego229484


10-25-2017 6:53:48 PM

John WilsonLatham & Watkins LLP00229484


10-25-2017 6:53:48 PM

Jordon HarrimanLewis Brisbois Bisgaard & Smith, LLP117150


10-25-2017 6:53:48 PM

Kenneth SumnerSinnott Dito Moura & Puebla, APLC00178618


10-25-2017 6:53:48 PM

Kevin MccurdyMcCurdy & Fuller, LLP115083


10-25-2017 6:53:48 PM

Kirk ChamberlinChamberlin Keaster & Brockman LLP132946


10-25-2017 6:53:48 PM

Linda MorrisonTressler LLP00210264


10-25-2017 6:53:48 PM

Max SternDuane Morris, LLP154424


10-25-2017 6:53:48 PM

Paul WhiteTressler LLP00146989


10-25-2017 6:53:48 PM

Peter GarchieLewis Brisbois Bisgaard & Smith105122


10-25-2017 6:53:48 PM

Peter JordanSimpson Thacher & Bartlett LLP259232


10-25-2017 6:53:48 PM

Randolph SinnottSinnott Puebla Campagne & Curet107301


10-25-2017 6:53:48 PM

Richard GoetzO'Melveny & Meyers115666


10-25-2017 6:53:48 PM

Steven CraneBerkes Crane Robinson & Seal LLP108930


10-25-2017 6:53:48 PM

Thomas BeerHinshaw & Culbertson, LLP148175


10-25-2017 6:53:48 PM

This proof of service was automatically created, submitted and signed on my behalf through my agreements with TrueFiling and its contents are true to the best of my information, knowledge, and belief.

I declare under penalty of perjury under the laws of the State of California that the foregoing is true and correct.

10-25-2017 Date

/s/Deborah SteinSignature

Stein, Deborah (224570) Last Name, First Name (PNum)

Simpson Thacher & Bartlett LLPLaw Firm

IN THE SUPREME COURT OF THE STATE OF CALIFORNIA€¦ · Answer to the Petition for Review...

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